, 6 tweets, 4 min read Read on Twitter
FWIW, here are my subjective rankings of the #ToryLeadershipContest #tax cut proposals. (This is a personal view only - I don’t have a dog, or even a vote, in this fight.) In reverse order… (1/6)
No. 5 (i.e. last). Reform #VAT and replace with a sales tax (#Gove). Bad economics. VAT is a relatively efficient tax and the current system already allows the UK gov’t to set lower rates for some goods and services to help the poor. #Brexit will increase this flexibility. (2/6)
No. 4. Raise the threshold for paying the top rate of income tax (#Johnson). Neither one thing nor the other? Won’t actually make much difference to those earning just above the old threshold, or any difference to those who earn a lot less. (3/6)
No. 3. Cut the 45% top rate (#Javid). More likely to pay for itself, at least in part, as higher-income individuals are most responsive to changes in marginal tax rates (a fact, not any sort of value judgement). Cutting rate from 50% to 45% was estimated to cost only £100m. (4/5)
No. 2. Cut corporation tax further (#Gove, #Hunt). Companies are only legal entities and cannot bear the economic burden of tax themselves. More reductions would be good for all stakeholders, including workers and consumers. Plus well-timed for #Brexit (#GlobalBritain etc). (5/6)
No. 1. Lower the basic rate from 20% to 15% (#Raab). Would do most to help middle and low income families, and make work pay for those nearer the bottom. Perhaps the smallest indirect impact via behavioural changes overall, but the biggest direct boost to spending. (6/6)
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